Biden gives Defense Production Act authority to bring Energy Transition Supply Chain home

June 6, 2022
Biden invoked the Defense Production Act to spur U.S.-based manufacturing in energy transition categories including solar power, transformers and electric grid components, heat pumps, insulation and electrolyzers, fuel cells and platinum group metals

President Biden moved Monday to strengthen the domestic supply chain for lower and zero-emissions energy technologies.

Biden invoked the Defense Production Act to accelerate U.S.-based manufacturing in numerous energy transition categories. Those include solar power, transformers and electric grid components, heat pumps, insulation and electrolyzers, fuel cells and platinum group metals.

The moves, if fully realized, could lower energy costs, strengthen a domestic supply chain and achieve greater decarbonization of the nation’s energy output.

“President Biden has invoked the Defense Production Act so that the U.S. can take ownership of its clean energy independence,” said U.S. Secretary of Energy Jennifer M. Granholm. “For too long the nation’s clean energy supply chain has been over-reliant on foreign sources and adversarial nations. With the new DPA authority, DOE can help strengthen domestic solar, heat pump and grid manufacturing industries while fortifying America’s economic security and creating good-paying jobs, and lowering utility costs along the way.” 

Concerns over the security of U.S. energy technologies, due to a global supply chain including China, date back several administrations. President Trump also put out an executive order to protect power grid equipment from cyberattack.

Electrolyzers and fuel cell technologies were included in the DPA invocation as the C&I sector turns its hopeful eyes toward hydrogen as a baseload and transportation resource. Hydrogen does not release carbon emissions when combusted, but it also is not mined naturally.

H2 is created for industrial purposes mainly through steam reforming of methane gas, a more carbon-intensive process, or by electrolyzers which separate the hydrogen and oxygen from water.

U.S. installed solar capacity has risen from nearly zero in 2000 to nearly four percent of national net generation, according to the federal Energy Information Administration. EIA projections forecast that will grow nearly 1 trillion kWh and 20 percent of the mix by 2050.

Many solar panel and module components, however, are made and shipped from Asia and other nations.

“We applaud President Biden’s thoughtful approach to addressing the current crisis of the paralyzed solar supply chain,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. “The president is providing improved business certainty today while harnessing the power of the Defense Production Act for tomorrow. Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home.”